As a leading supplier of custom-fabricated steel, Builders Steel Direct (BSD) had an opportunity for growth. But due to their relationship with one of the big banks and a subpar debtor finance facility, they were limited in what they could achieve. Conditions were strict and there was little flexibility, so they looked for a more innovative finance solution.
Once their contract with the bank ended, they approached Octet for a custom supply chain finance solution that could help them achieve their growth goals. This transition yielded many benefits for BSD, effectively doubling projected revenue for the 2023/24 financial year.
Read on as we explore how Octet’s trade finance, debtor finance and supply chain management solutions empowered this industry leader to achieve its vision.
A burgeoning company’s stifled growth
NSW-based BSD specialises in steel fabrication for residential dwellings and maintains strong partnerships with leading suppliers in the construction industry.
BSD sources all of its structural beams and RHS (rectangular hollow sections) through Australia’s largest privately owned steel distributor. The company prides itself on providing clients with high-quality materials and innovative solutions.
BSD had already achieved great success in its 13 years of operation, but had bold plans for further growth. Director Jason Wright found that inadequate debtor finance facility options and barriers from banks were hindering their plans. The company was searching for a more innovative solution.
“The issue with the big banks is that we wanted to grow, but their process was too slow and cumbersome,” Jason says. “And they had onerous conditions that just wouldn’t work with our business.”
After hearing a radio ad for Octet’s supply chain finance solutions, Jason reached out to Dan Verdon, Octet’s Director of Working Capital Solutions, to learn more.
“We had business plans,” Jason says. “We had dreams of making this business what it is today, and what it will be tomorrow. So we went looking and found Octet.”
A custom-fit supply chain finance solution
After deep discussions with Dan about the best solution for BSD, Jason employed Octet’s trade finance facility while using their existing bank’s debtor finance facility concurrently. After their original contract with the bank ended, they refinanced from their existing debtor finance facility and scaled up significantly with Octet.
As a result of an investment in new premises and machinery, BSD is forecasting turnover to continue to grow by 40% by the end of this year compared with the previous period. It is likely that Octet’s receivables facility will be increased in line with that growth.
So, what drew BSD to Octet? Initially, it was the solid reputation of Octet’s supply chain finance solutions, including its manufacturing finance offerings and dedicated online platform. Jason had heard from outsourced accountants about the facility’s ease of use and flexibility, and wanted to see what it could do for his business.
Octet’s online supply chain management platform made it easy for BSD and their accountants to maintain complete visibility over their finances and trading history with key suppliers. The supply chain platform allows businesses to track, validate and authorise transactions at every step, making business management and financial decisions simpler.
Working capital solutions, like those BSD leveraged at the beginning of its partnership with Octet, help fund transactions at critical points of a company’s trading cycle. They work by boosting cash flow and ensuring stock is available during peak periods. This type of solution can be particularly beneficial during the growth phases of a company, or really, at any stage.
For BSD, the power to scale and accelerate business growth was made possible with Octet’s trade finance facility, which can be customised to reflect a business’s growth objectives. It allows companies to do things their way and set supplier trading terms that suit them. Importantly, it can also be tailored to suit most businesses and industries.
71% revenue growth, and counting
With Octet’s support, BSD continues to realise its true potential. And the results speak for themselves.
Thanks to Octet’s trade finance facility, BSD’s ability to purchase more stock greatly accelerated the company’s revenue growth. As a result, the company has achieved revenue growth of 71% across the last three years – with no signs of slowing down.
Bigger, better things in store
BSD is now on track to achieve further growth, with a doubling of revenue predicted for the 2023/24 financial year.
And it’s not only the revenue that’s improved. Greater financial flexibility means BSD can now more easily procure stock from local and global suppliers. This speed and efficiency delivers flow-on benefits for all other aspects of the business.
The future looks bright for BSD. With a relocation to larger premises scheduled for mid-2023, this growth has yielded unique opportunities and a chance to scale up that simply wasn’t possible before.
A partnership built on solid foundations
Octet provides a suite of financial services and solutions to businesses so they can flourish without having to navigate the roadblocks of traditional banks.
Trade finance is just one of the ways Octet helps businesses thrive. Octet also works with a wide range of businesses across industries, providing other tailored working capital solutions to help them achieve their goals.
Jason urges any business owner to look outside the big banks and discover what’s possible.
“Our supplier relationships are critical,” he says. “Every business needs a finance partner who understands them and can help fulfil their obligations and facilitate sustainable growth.
“Octet is exactly this type of partner for us.”
Start thriving with Octet
Octet has the supply chain finance solutions and technology to help accelerate your business growth, so reach out today and discover what’s possible when you partner with the best.
Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.